Last September, President Obama issued an executive order requiring federal contractors to allow employees at least seven days of paid sick leave. Proposed regulations issued in late February 2016 (subject to public comment until March 28) added flesh to the bones of the executive order. Final regulations are to be published and will take effect by September 30.

The number of people working under contract for the federal government is huge — so big, in fact, that the Congressional Budget Office last year couldn’t even estimate a number when asked to do so by a member of the House Budget Committee.

In its 2014 fiscal year, the federal government spent $619 billion for contracted products and services, which suggests that a vast army of workers will be covered by the paid sick leave requirement. For perspective, that’s about 30% above the annual revenue of Walmart, the largest private employer, with some 2.2 million workers.

Informal Standard

The President’s goal in issuing the order was not just to ensure paid sick leave benefits for those specific workers, but to set an informal standard for all other employers. While a significant proportion of employers already provide some paid sick leave, few are likely to have a policy as liberal as the one that will apply to federal contractors.

Here is some of the key language defining the basis on which a contractor’s employee can receive paid sick leave. Specifically, paid sick leave earned may be used by an employee for an absence resulting from:

  1. Physical or mental illness, injury or medical condition,
  2. Obtaining diagnosis, care or preventive care from a health care provider,
  3. Caring for a child, a parent, a spouse, a domestic partner, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship who has any of the conditions or needs for diagnosis, care, or preventive care described in paragraphs 1 or 2 or is otherwise in need of care, or
  4. Domestic violence, sexual assault or stalking.

The proposed regulation elaborates on what is meant by the “equivalent of a family relationship,” while noting it cannot list every possibility. Here are some examples:

“It could include, for example, an individual who was a foster child in the same home in which the employee was a foster child for several years and with whom the employee has maintained a sibling-like relationship, a friend of the family in whose home the employee lived while she was in high school and whom the employee therefore considers to be like a mother or aunt to her.”

Another family-like relationship example is an elderly neighbor with whom the employee “has regularly shared meals and to whom the employee has provided unpaid caregiving assistance for the past five years and whom the employee therefore considers to be like a grandfather to her.”

What Verification Can You Ask for?

Employers would be allowed to ask in general terms about the nature of an employee’s relationship to the person he or she wishes to assist. “The request need not provide extensive details regarding the employee’s relationship with an individual for whom the employee is caring or will care; it need only inform the contractor that the employee has a family or family-like relationship with the individual,” according to the proposal.

Although employers can probe a little bit when the leave request pertains to a nonfamily member, “the contractor may not demand intimate details upon receiving a positive response to such an inquiry,” the proposal says.
When sick leave requests involve medical care, employers would not be permitted to demand evidence of that need for care until the employee had taken at least three days of leave. At that point, the employer could ask for certification from a health care provider. However, the employee would not be required to supply the documentation before 30 days had elapsed.

Recordkeeping Requirements

Once the rules go into effect, federal contractors will need to maintain detailed records of actions related to paid sick leave requests and the granting of those requests.

Penalties for employers who are found to violate the regulations’ requirements will be similar to those imposed under the Family and Medical Leave Act. Specifically, employers will be required to compensate employees for costs they incur as a result of being denied paid leave, such as wages and benefits forfeited by taking leave without pay.

How Will this Affect Your Company?

As noted, the regulations technically will not dictate policy for companies that don’t do business with the federal government. But knowing what’s coming down the pike for them can help you prepare for possible questions about your own sick leave policies, and help you to ensure that your benefits are sufficient to keep you competitive in your labor market.

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